The Smartest Man Online

Panama is an interesting country to study, economically. With great taxation laws, banking laws, and rules that promote business, its growth over the past 20 years has been astounding. Much of it can be seen just visiting for a few days. Skyscrapers are everywhere, and the amount of construction going on in is, quite frankly, unbelievable for a country of only 2.5 million people. Within a 1 mile radius I saw no less than 5 newly built skyscrapers that were still under construction, all of which were at least 15 stories tall. While the economy there appears to be quite strong, just the sheer volume of new commercial space opening up tells me a possible real estate bubble could (more…)

Some countries win and other countries lose. While the fortunes of a certain geographic area of the world certainly can change over times, there are some areas in the world that are doomed to poverty forever. One of those areas is Pakistan. (more…)

The week ending July 4th, 2008 was a bloodbath for world equity markets. Of the major indexes, only 2 were positive for the week overall: Austria, which gained 1%, and the Czech Republic which skyrocketed 7%, despite the financial stress in the system globally. The worst performing markets got crushed, with the Pacific Rim containing 6 of the bottom 10 performing equity markets for the week overall. Outside of Asia, Ireland, Brazil, and Chile were the worst performers, dropping between 6-8% each, with Turkey putting up the worst numbers, dropping an outrageous 10% in a single week. (more…)

Stocks throughout Asia have been getting hammered recently, as the worldwide financial crisis worsens, and has reached virtually every country on the planet. The Japanese stock market index has now been on a consecutive losing streak of 12 days, its longest such streak in 5 decades. (more…)

For years now, the Euro currency has been on a tear, killing the US dollar and most of the world’s other currencies along with it. If we look solely at the Euro/Dollar relationship, the past few years has not been that big of a surprise. The Dollar has huge debts hanging on its shoulders and external debt is mounting by the day to the tunes of billions of dollars thanks to Asian central banks. The printing press in Washington is increasing the supply of dollars every day, debasing and devaluing the currency, and inflation is being totally ignored by Mr. Bernanke & company, leading to lower interest rates, despite oil rising to $140/barrel. The Euro on the other hand, has strict requirements on balance of trade figures, and has been far more hawkish on inflation than its US counterparts. This one way relationship, however, has gone to such an extreme, that virtually everyone on the planet is bearish on the Dollar. While certainly the Euro is a better currency than the greenback, the US economy is still far more potent than the ticking time bomb in Western Europe. The Euro bubble has reached its climax, and will reverse course over the next 2-3 years in major way. (more…)

Over the past several years, the United States economy has been upside down on many fronts. While some of it is obvious, (i.e. no down payment mortgages, etc.), others are not so obvious, unless a deeper look at people’s personal financial situation was analyzed. If I had to characterize the economy of the last decade, it would be “the decade where the poor lived better than the rich.” (more…)

The bottom of the real estate market is near? Are you kidding? The stories by economic journalists who are claiming that the bottom of the real estate market is in sight are pure fiction. They either have nothing else to write or they own a home themselves and are wishfully hoping and praying that their fortunes turn around. Real life is not a fairy tale though, and the economic crisis right now is worse than it has been at any other point. It continues to worsen every day and the real estate market is still in the process of being crushed. (more…)

A media war recently has pitted the former “guru” of central banking against pundits who claim that he is to blame for the current housing crisis. Mr. Can-Do-No-Wrong of the 1990s is now being accused of sacrificing the long term to save the short term crisis that existed when the tech bubble burst. How much of an effect did long lasting low interest rates have on the housing bubble in America, that is now threatening to throw the economy into a recession, or possibly worse? And is Greenspan’s argument that the run-up in housing being a worldwide phenomenon exalt him of any wrong doing in this matter? Those issues are discussed below. (more…)

Rice, the staple crop of half the world’s population has risen to a 34 year high on the back of increased demand not being met by current supplies. With world stock declining and worldwide stock markets and economies in the tank, a perfect storm may be brewing. (more…)

Oil as a commodity has been the dominant force in the energy world over the past century for many reasons. A low cost of production, while important, has been a result of oil containing high amounts of energy and being easily transportable. Coal, which may be equivalently abundant, does not provide the same amount of energy, and is more difficult to transport long distances because of its solid state. On the same token, natural gas, while being high in energy output, has been difficult to transport because of the current inability to transport gas effectively. That, however, is quickly changing as liquid natural gas terminals may one day make this cheaper, cleaner burning fuel the commodity of choice for energy production. (more…)